. for sarching the auto industry of the the economy is doing well despite the best efforts of republican obstructionists who worked hard to shut down the government, folks with the national deficit dropping at its fastest rate in 60 years? it is time to stop the obsession with deficits and start an obsession about middle-class job creation. >> well, governor granholm, i'm going to give the president credit for these numbers -- >> stop the presses -- >> but this nation is still woefully unemployed. he has to take credit for that, too. i know his numbers could not have come at a better time for an administration that's had a rough couple months. in the crossfire tonight, a pair of economic experts, david madlin director of the american worker project for the center of political progress. >> and david, let me start with you. even though this morning's jobs numbers sound really good.

a lot of people are just giving up and stopping looking for jobs. they're going on disability. the dependency on government has absolutely ballooned until this quote/unquote recovery. i think folks in your camp want more dependence on government, yes? >> no, we want jobs. >> but how dots there? >> in fact you follow the president's agenda, which has created 45 straight months of job growth. that is going the right direction. >> it's not fast enough and the quality of the jobs is not good enough. the first thing is to stop the sequester, this across the board slashing of government, which cuts the good stuff and the bad stuff. we could be much more targeted, because the biggest problem right now in the economy is still the lack of demand. consumers don't have enough money in their pocket. government spending is part of that demand and it's being cut. so we can start by reversing that. >> in fact, nancy, you know, the republicans this week made a big deal about not wanting to increase the minimum wage, which

is an issue about creating dema demand, and yet i have not heard a single specific things that republicans want to do or would be willing to do to create middle-class jobs. please just don't say tax cuts and cutting the deficit. >> can i just start by saying i don't know what anybody has been smoking here, but if you think this is a good economy, then we need to start all over again. what you need -- first of all, 203,000 jobs, i'm glad that we've got that, about you we need to create at least 150,000 a month just to keep our mouths -- let me finish. >> okay. i'm waiting. >> what you need to pay attention to, and david is well aware of this is the labor force participation rate. what we have seen is people, particularly young americans, are opting out, they are giving up, underemployed. that means they're getting part-time jobs. it's about 63%, which is about a

30-year low, which means that 47% of this economy has basically given up until obama. these policies have not created economic growth, and everybody knows it. >> but wait, wait, ants my question. >> i can answer it. >> the house republicans is 40 jobs create bills that are stalled in the senate. >> they're all the same two things. >> no, they're not. they're energy job, they're rural jobs, farm jobs. >> the biggest thing you can do to create jobs, whether you're a republican or democrat, and this has been true throughout centuries, is for the government to be smaller and for the private sectoring to bigger. that means less regulation, not the monstrous expansion we have seen, and we just got the tip of the iceberg there. >> wait, wait, wait. wait a second. >> more taxes, less spending, and same -- >> the administration -- however -- >> i want to hear the governor

here. >> it's down to pre-stimulus levels and heading in the right direction. >> despite obama. the sequester, by the way, is less than 1% of total federal spending. if we think this nation cannot tighten its belt, then we should give up. >> david, go ahead and get in here. >> what you have recited as the way to go forward is what we have done for the past 30 years, which is cut taxes on the wealthy, cut regulations on business, and it's proven to be a failure. that's where the direction -- that's why you've been so opposed to the president's plan. it is a reversal of where we failed. >> how can you claim we have rereduced regulation, whether it's under president bush or president obama. there's been an explosion of regulation burden. >> that's what we are starting to reverse. we are starting to create the conditions for a prolonged expansion. it is far too weak, i agree with you on that point. we have the agreement here.

>> i would start with expansion. >> listen, the governor brought up raising the minimum wage. i want to ask you about that. because here's what i don't understand, and i think most republicans don't understand. if the walmart in, say, rural north dakota that services four towns and employs half the population is forced to double its wages, its salaries, and then that walmart decides to cut its labor staff and raise prices on the rest of the community, who is that helping? >> well, that's not what happening when you raise the minimum wage. >> of course it is. >> no, it doesn't. what happens is you put more money into people's pockets, workers' pockets. they go out and spend that money. that has a stimulating effect on the economy. >> with no repercussions on the business itself, or the price of the product? >> here -- >> what fantasyland is that? >> you mentionled walmart. it would at about 50 cent for a shopping trip expense, very manage agent.

>> says you. >> no, actually it says university of -- >> you add that to multiple items every week -- >> we're talking about employment. here's the key thing. the minimum wage has no effect on employment. you try to say it kills jobs. it doesn't. vermont, among the highest minimum wages in the country, among the lowest some -- and the lowest unemployment rates in the country. we have study after study that shows raising the minimum wage doesn't kill jobs. it boosts workers' wages, which is what we need to do. >> wait, wait, wait. >> i fundamentally disagree with you. econ 101, if you raise the cost of something, you get less of it. in fact -- >> every study has shown has recently reviewed this. the university of chicago school of business, hardly a liberal lefty organization, has studied the whole state of studies that have looked at minimum wage.

they have found the overwhelming majority of them say that raising the minimum wage does not affect unemployment. let me tell you, in this walmart example, you have the waltons who own walmart. six of them are richer than the lower 42% of the -- >> that's not fair, but -- >> all i'm suggesting is that if they shared that a bit with their workers, like henry ford did way back in the day and paid $5 so his employees could buy the cars they were producing, that's exactly -- >> the walton family has created hundreds of thousands of jobs, has done -- >> good for them. >> done. >> what they haven't done is paid them a fair and living wage. >> back to the minimum wage point, because when you talk about employment, i would assume we care a lot about the people who are at the lowest end of the employment ladder, particularly those who have the hardest time, that tends to be historically teenage male minorities.

when you raise the minimum wage, the people who are the first -- the last hired are the first fired. they are the ones who do not get the job. that is why it is the example with supply and demand that has given in the first -- >> why would you pay more to stay in a low income job, low-skill job longer. >> because most of the people working minimum wage are adults. that's a very. but really you're example assuming human beings are widgets. human beings, when you pay them more, you get more effort and reduce the turnover, they stay in the job longer and become more skilled. the company benefits. they get better -- you also save the taxpayers money. we are subsidizing low-wage workers, because companies aren't paying them enough. next, though, david, i want to ask you why thousands of young people are signing up for

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welcome back. in the crossfire david madland and -- the president's supporters are jumping up and down, because november saw the best hiring and lowest unemployment numbers in five years, but news flash, plenty of people are still hurting, include some of obama's core supporters. mill lennialened -- so in new jersey they're doing something to compensate. online gambling just became legal, with web sides dime to,

signed up during the first week. it seems more people are willing to bet their future. >> whatever. talk to me in a month. >> new jersey is so cute. explain to me -- talked about -- as we just discussed, unemployment among yit is higher than the national average. we've seen polls that millennials are disillusioned. what fiscal policies have been implemented. >> well, you started off with health care. >> don't say they can stay on their parents' insurance. that's not enough. >> they also they're unemployment right now.

they can -- >> they can, but they don't want to spend that money. >> really to change the direction of the economy. when he took office, 700,000 jobs a month were falling off the economy, losing jobs at an amazing rate. it's picked up significantly. it has dropped just like for everyone else. >> i think millennials, as well as a lot of people want this minimum wage raised. i want one last follow-up. nancy, you were affiliated with the republican party. do you think that republicans would be happy to run against statewide ballot initiatives in 2014, with the raising of the minimum wage? my advice would be to put it on every state ballot.

>> i can understand why you would make that recommendation. reply kale a smart move. economically i think it sounds good, but it hurts the people -- i think political it's a smart move. it takes longer to explain why it's bad policy -- >> and it's counter-intuitive. that's my answer, as an economist it's bad policy, from a political strategy standpoint, i can understand why democrats would want to do so. >> and let democrats get it on the ballot. >> thank you. take your message. >> exactly right. the numbers were encouraging today. the long-term unemployment is another issue holding up potentially a budget agreement. would you be in favor or opposed to the extension of long-term unemployment benefits? >> i don't think there's a need to extend them further. it rather from state to state. you can have them be as

relatively low as, say, 19 weeks in a stayed like north carolina, but they can be over 72 weeks in other places. what we have found is while it's compassionate, you want to help people who are out of a job, particularly if it's transitional, but the longer the period, the less inclined they are to search and the longer they stay out of the job market, the less likely they are to get back into the job market. >> david, how long would you go? 100 weeks? 200 weeks? why not indefinitely? >> when the unemployment rate is so high that there are three or four job seekers for every job, i think it's the right thing to do. >> for how long? >> for how long? >> for how long? how long long it takes? >> as long as it takes. the point to unemployment insurance is when people can't get jobs, when they're actively looking, you have to be actively looking for a job.

>> we have spend half a trillion on unemployment benefits. >> the cbo just said if we cut this extension, we will kill jobs, because those people who are looking for work won't have any money to spend. whose job left, because he's been a factory worker. that guy is not going to be picked up immediately. especially without training. we're talking economic reality. >> he is not going to be able to pick up another job like this. that workforce training has been tut in half since 2000, and republicans refuse to invest in people to get them trained and up again. that's to me is the greatest travesty of all.

it's not done well at the federal left. we can talk unemployment benefit all we want. when you ask the average american how long that should go on, it is usually roughly half the period of time that is being discussed at the federal level. what unfortunate to do is solve the root problem, which is turn the economy around. i'm sorry, we have -- i am opposed to -- >> i'm with you on pushing money back to the states. >> it's like being stuck in a treadmill rather than sprinting. >> do you think the republicans in congress would be willing to gran to states the flexibility, put it back to where it was in the year 2000, gives it to the states to be able to use the community colleges. do you think they would? >> i have no idea. if they decide to do it, they should do it with no net

increase. i think he knew a few. i'm just saying. >> we started this show talking about improving jobs numbers. how long before we decide, object, the economy is improves? at the current rate we're going which is too slow, we'll be at two plus more years of unemployment rate at about 6.5%. what we really need to do is to create jobs. better jobs. this is where the minimum wage starts to come in. all the strikes we've been noticing. these are workers, especially fast food places that are demanding much higher wages than they're colonelly getting which is a start. >> we're talking about raising the minimum wage.

nancy, rand paul, senator paul was in detroit today. and he laid out an economic strategy. some of which i like and some of which i think was problematic. one of the things he said he wanted to do was to lift the requirements of paying prevailing wage and paying a wage to construction workers that for union construction workers. he said i want to lift that burden from construction companies. we've been talking about raising the wage. do you think it is an i crease in prosperity? >> i think it could be if it creates jobs. as someone who had a record that was not all that rosy, i think should you allow me to answer. when you economic growth, it doesn't matter if you set an artificially high wage. he's talking about lowering the artificially high costs in a state that is hemorrhaging jobs.

so when you had other states even with similar manufacturing bases that were doing well, this state was doing poorly. >> you went bankrupt. hello! >> do you know what? hello! >> toyota built flourishing plants in places like tennessee. so higher regulation, higher taxes and you had prevailing wages. >> wait a second. >> let her defend her record. >> let me be clear about this. michigan's economy for 100 years has been tied to the american manufacturing industry. there has been a global shift in manufacturing jobs to low wage countries. the auto industry was part of that. we lost huge amounts of jobs. it is true in the first decade of this century because of the shift in manufacturing jobs and the president who did not do a thing to raise his hand to help manufacturing. this is my point. we have a government that has not done anything to help

industries like manufacturing stay in this country. unlike our economic competitors in other countries who have done, who have aggressively intervene. you can't attack my record without listening to me respond. what i'm telling is that you the loss of manufacturing and automotive jobs in michigan was not the governor's fault. it was global forces that were beyond the fault of a governor but certainly could have been help by a bush administration that would reach its handled out to help manufacturing. that's my point. that's exactly what the obama administration has done. reached out to help automotive manufacturing and look at the results now. we've got an automotive industry in america that is flourishing and auto sales that are at record levels since 2007. >> okay. stay here. next, the final question for both of our guests. we also want you at home to weigh in on today's fireback question. does president obama deserve credit for the drop in unemployment? tweet yes or no using hash tag "crossfire." [ male announcer ] at humana, understanding what makes you different

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we're back. >> 200 admit especially after our exchange that we just had. in the number were 1.5 billion jobs that were saved because of the auto rescue. you have to admit it was a good thing. >> i think that what helped the auto industry was actually bankruptcy.

so it wasn't spending their way out of the problem. it was the bankruptcy process itself that allowed people to get rid of assets that were no longer performing and to keep the assets that were. >> my final question is about income equality. as a progressive, aren't you a little disappointed? >> i'm very pleased the president has started to make this a big issue. two days ago i was at a speech he gave which talked about the problems, not just that some people were not doing well but it means the whole economy suffers because we don't have a strong middle class. we don't have adequate demand. it means we don't have government that works. not enough middle class to demand the policy that's we need. >> so you are not disappointed. >> no. >> thank you everyone for joining us. to go facebook or twitter to weigh in on our fireback

question. does president obama deserve credit for the drop in unemployment? 64% say yes. 34% say no. the debate continues. from the left, i'm jennifer granholm. >> from the right, i'm s.e. cupp. join us monday for another edition of "crossfire." erin burnett "outfront" starts right now. next, the dow jumps on a job buster report. a deadly win storm ravages states from texas to tennessee and beyond. the latest from texas where some parts, it is colder than it is in alaska. >> and sound of music live scores a ratings hit. why is the lead under such a vicious attack on social media? this is erin burnett "outfront." i'm jake tapper.